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FHA can do 3.5% up to the FHA limit for that county. In my area, you can't get that size acreage for the FHA limit so it will be well over the 3.5% down requirement of FHA.
VA also has a loan limit and after that, the vet has to bring in 25% of the amount above the loan limit.
And yes, these deals happen regularly as long as the property is predominantly a residential property and not a working farm. So out here we see horse properties that aren't commercial, homes with timber conservation, deferrals, etc. Working farms won't qualify for those loans, but predominantly residential use will. Maybe that is different in other states with 3 acres being some sort of cutoff, but that isn't the case in the PNW.
Our house sits in the middle of 25 acres with a 6 acre lake. A fishing pier is about 20 yards from our back door. Appraisers just appraise the house and acreage but don't even consider the lake.
I'm thinking banks don't want to finance more than just the value of the house so other features of the property are not considered.
When we bought the property years ago we paid $10,000 over the appraised value because of the lake.
I want to know how much we should add to the appraisal when selling. Any ideas?
Of course the lake is in the appraisal. Comps would also consider the lake.
In Michigan, any natural, open body of water consisting of 5 acres or more is generally considered to be a lake. A small lake would definitely add value to acreage around here; larger lakes would add more value. Any Michigan appraiser would be remiss if they did not consider the added value of lake property.
When all is said and done, however, an appraisal is still just an opinion of estimated market value. Appraisals--especially of land--can vary significantly since an appraisal is only as good as the person doing the appraisal. Ask 10 appraisers to place a value on land and you'll probably receive 10 different answers. Hopefully, they'll all be in the ball park, but I've seen many land appraisals which were simply unreasonable--sometimes double; sometimes half of actual market value. That most often happens when appraisers from out-of-the-area attempt to appraise property in a very localized market.
In the private real estate transactions that I work on, I would never rely on an appraised value to arrive at a purchase price. Unfortunately, many of the government programs that I sometimes deal with rely exclusively on appraised values. This is due to federal real estate acquisition policies. They require appraisals to determine sales prices--whereas in private transactions the sales price is almost always a negotiated amount. I understand the rationale for doing so, but it creates a situation in which many purchases are made at above market value, with taxpayer dollars. Were I able to negotiate some of these transactions, I'm confident that I could easily save at least 10-15% on many of them. I'm working on one project now where I probably could have saved taxpayers over $100,000...but an out-of-county appraiser thinks that he knows better. Oh well.
Our house sits in the middle of 25 acres with a 6 acre lake. A fishing pier is about 20 yards from our back door. Appraisers just appraise the house and acreage but don't even consider the lake.
I'm thinking banks don't want to finance more than just the value of the house so other features of the property are not considered.
When we bought the property years ago we paid $10,000 over the appraised value because of the lake.
I want to know how much we should add to the appraisal when selling. Any ideas?
It's not a cut and dried thing. It depends on where you live. If you had a view in Malibu, it could be worth $1m. If you had a view in the Blue Ridge Mountains, it could be worth $50k. No appraiser or realtor could answer your question without knowing where you are and looking at the comps.
IMO—having a 6 acre body of water on a private property doesn’t really rank as “lake” property That is a big “tank” as we would say in TX
It is man-made—not natural body of water
Lakes in our state are considered LARGE bodies of water with public access most of the time because they are public bodies of water...
There are some parts of waterlines that are privately owned for some lakes and some lakes have no private property along their shore lines
Homeowners can lease land from the government entity that controls the lake—
Corp of Engineers usually
Sometimes another government agency
So what you are describing as a “lake” isn’t like owning property on Lake of the Ozarks for example...
That makes a big difference in how it is valuated IMO
So subjective. If someone doesn't want a lake your property won't be "worth" as much as property that doesn't have a lake. Might be as simple as liability (trespassing kids drowning in it for example). A designated wetland classification can put a lot of restrictions/obligations on the owner.
This, I had a similar property in the past and all I can say is never again. The water was a constant attractor of trespassing children. We never really got to enjoy it.
The important factor, is it a pond or a lake. If light penetrates to the bottom, it is a pond is one test.
Then comes wet lands laws, both city, state, and federal, and how they can control the pond/lake and adjoining land use. In some situations, due to effects of wet land laws, a small pond/lake can even reduce the value of your property.
And your putting walking trails over the property, is of no real value. It can add appeal, but no real increase in value for the property.
Trying to get on a thread such as this one, ideas of how much value if any the pond/lake ads to your property, can give you no help. None of us can know the federal, state, local wet land laws and how the pond/lake brings to, or deducts from, the value.
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